Energy policy will change under GOP House

With the Republican Party's newly won control of the House of Representatives, n
ational energy policy could be rolled back to 2005, with all legislative advance
s under a Democratic Party majority at risk. Republicans could adopt a dual-trac
k strategy that attacks energy regulation through budget reductions of the Envir
onmental Protection Agency that de-fund efforts to impose carbon emissions on in
dustrial infrastructure, at a minimum coal-burning utilities and the gas and oil
complex of extraction and refining.
With a Republican House majority, no further loss of tax code advantages for the
oil and gas industry is anticipated. While the Oceans Management remake of the
Department of Interior's Mineral Management Service can be indirectly restrained
through the Interior Department budget, originating in the House of Representat
ives, its existence and mission as a regulatory enforcer of off-shore oil and ga
s development is beyond a roll-back. This is a permanent institutional change as
a direct consequence of the BP oil spill in the Gulf of Mexico.
No consideration of carbon cap and trade is even remotely expected. In New Mexic
o, oddly enough, with a Republican majority in the House opposed to a federal ca
p-and-trade law, conditions for a state version will in theory become more favor
able. However, the rejection by both candidates for governor of the current init
iative should block local efforts to fill the federal void.
The new Republican majority could impose restrictive legislation on renewable en
ergy strategic tax incentives which provide Treasury Department cash pay-outs of
30 percent of construction investment costs of solar energy and other renewable
s. This could be done in several committees holding hearings on the dependency o
f renewables manufacturing and capacity expansion on continued government suppor
t in conflict with market conditions of abundantly cheap natural gas as a price-
setter and competitor.
Partial repeal of the Energy Independence and Security Act of 2007 will be a tar
get of the new Republican majority. Although approved by President George W. Bus
h, the mandate for 36 billion gallons of renewable fuel by 2022 could be subject
to revision. There is currently popular resistance to the ethanol requirement o
f 10 percent from 5 percent per gallon of gasoline because of consumer issues wi
th the risk to pre-2007 engines. A Republican majority could attempt to cap the
requirement at 16.3 billion gallons, which is scheduled in 2013, freezing the 10
percent change and avoiding further consumer problems at the pump.
Sen. Jeff Bingaman, leading a Democratic Party majority in the Senate, will be c
ompelled to defend both renewable energy and the moderate renewable portfolio st
andards (15 percent by 2021) he has proposed in the remnant of the current sessi
on of Congress. He could invoke a call to Republicans for a bipartisan consensus
to recognize what has been done and avoid the bitter and costly fight to roll i
t back. Some Republicans might consider this opening as preparation in 2012 for
the contest over the White House: a consensus position avoids the tag of anti-re
newable energy and environment in that presidential campaign . A consensus frame
work would stabilize at least $275 billion in renewable energy research, investm
ent, finance and development costs.
Some of this is carried on the books of major oil and gas companies. New Mexico
research universities and national laboratories have established innovative tech
nology capabilities along with student career commitments in renewable energy. W
hatever the direction of the market, a Republican majority in the House of Repre
sentatives could discover national economic and energy security value of support
ing renewable energy basic and applied research.
World green energy technology leadership has been taken by China. With the excep
tion of final technical mastery in solar power, China is now the dominant low-co
st developer, producer and exporter. A Republican majority in the House of Repre
sentatives could find itself defending renewable energy against China in much th
e same way as it rejected China's bid to buy UNOCAL (oil and gas) five years ago
â on national security and energy security grounds.
A roll-back to 2005 could revive the compromise that former Sen. Pete Domenici a
chieved that year under a strategy of energy diversity that emphasizes national
energy output expansion from all sources without political discrimination. To ro
ll-back to a fossil fuel policy preference would violate 2005.
Daniel I. Fine, Ph.D., is a research and energy policy associate for New Mexico
Center for Energy Policy, New Mexico Tech.
http://www.santafenewmexican.com/Opinion/My-View--Donald-M--Fine-Energy-policy-w
ill-change-under-GOP-Hou